CLIENT TALKING POINTS
Asia
Nikkei still trading with a 0.94 r-square to the Yen (get USD/JPY right, you’ll get Japanese Equities right) ; Chinese stocks (Shanghai Comp) backs off a big @Hedgeye level of 3279 TREND resistance; and Singapore continues to shine, up another +0.5% and +3.7% in the last month (bullish TREND @Hedgeye).
Oil
Nice +1.5% rip to fresh 3-month highs and that comes at an important time as yesterday’s selloff in both the commodities and equities shook some people out; Oil’s Volatility (OVX) continue to signal bearish in my process (that’s bullish for the trending price of Oil, even though it should signal overbought closer to $55 WTI).
XOP
Best macro way to play yesterday’s overreaction in Oil, Gas, and related Equities is to buy-back the Oil & Gas ETF (XOP) we’ve been waiting for the buy signal on; XOP tapped the low-end of my $38.51-40.80 risk range yesterday; with 30-day realized volatility in XOP up at 21% (vs. SPX down at 6%), XOP has an implied volatility premium of +18% now.
Asset Allocation
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 2/22/17 | 45% | 16% | 11% | 11% | 0% | 17% |
| 2/23/17 | 39% | 19% | 11% | 11% | 0% | 20% |
Asset Allocation as a % of Max Preferred Exposure
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 2/22/17 | 45% | 48% | 33% | 33% | 0% | 52% |
| 2/23/17 | 39% | 58% | 33% | 33% | 0% | 61% |
THREE FOR THE ROAD
TWEET OF THE DAY
The US economy is heating up. Positioning in Consumer Staples $XLP & Utilities $XLU sectors looks complacent. app.hedgeye.com/insights/57467
@Hedgeye
QUOTE OF THE DAY
“We're either winning or learning. It's not winning or losing, it's winning or learning”.
–John Calipari
STAT OF THE DAY
Jazz saxophonist Kenny G is the highest-selling instrumental musician in the modern era.